7% Rate Increase Is Urged For Edison

Two state hearing examiners laid the groundwork Tuesday for a rate increase of more than 7 percent next spring to pay Commonwealth Edison Co. for building its three newest nuclear power plants.

The examiners, aides to the rate-setting Illinois Commerce Commission, threw out half of the $1.4 billion that commission-hired auditors had said Edison wasted when it spent $7.1 billion building its Byron II plant near Rockford and the Braidwood I and II plants near Joliet.

With $700 million of the allegedly wasted spending declared prudently spent, Edison could have an easier time justifying a $1.2 billion, 23 percent rate-hike request pending before the commission. A decision in that case is due in March.

Hearing examiners Therese Freund and John Rooney said that if rate increases were to go into effect today, they would recommend a 7 percent, $361 million hike. But they proposed that the commission use the number only as a benchmark for its March ruling.

The hearing examiners` report is only a recommendation, and it can be altered by the commission. Freund, who has been involved in almost every major Edison rate case in the last decade, has regularly issued rulings favorable to the utility, including some that were later modified by the commission.

Twice in the last four years, consumer groups unsuccessfully have sought to dismiss her from hearing Edison cases, citing what they alleged was a bias in favor of the utility.

Those groups derided Freund`s and Rooney`s Tuesday proposal, saying it would set the stage for a rate hike of more than 10 percent in the spring.

The groups contend that the three plants aren`t needed and that instead of deserving a rate increase, Edison might owe its customers a rate cut.

``Examiner Freund is whitewashing the independent auditors` findings that there was substantial waste during the construction of the Byron and Braidwood plants,`` said Howard Learner, associate general counsel of Business and Professional People for the Public Interest.

Edison, which has maintained that none of the $7.1 billion spent on the plants was wasted, also criticized the report, but for disallowing too much of the construction spending.

``We think it is a punitive draft order that does not recognize the job that has been done for consumers by our Byron and Braidwood units,`` said Edison spokesman John Hogan.

Though the plants began generating electricity in 1987 and 1988, Edison hasn`t yet collected any of the construction costs from consumers.

In 1989, the commission approved a rate hike of $480 million, or about 9 percent, over two years. But last December, the Illinois Supreme Court ruled that plan, which also gave Edison an opportunity to come back after five years for more money, was illegal. The rate hike was rolled back, and Edison refunded the money it had collected.

The Supreme Court also sent the case back to the commission for a rehearing. But before the rehearing started, Edison last April filed the new, 23 percent rate-hike request.

In their recommendation Tuesday, Freund and Rooney suggest that the commission essentially combine the two cases.

The agency`s technical and research staff, which also issues advisory opinions, earlier suggested that Edison deserves an 11.9 percent rate hike in March.